'Just covered on paper?': CA decodes the importance of insurance to protect financial dreams

A recent financial insight shared by CA Nitin Kaushik has sparked an important discussion about how well young professionals are really protecting their financial dreams. 

In a post on X (formerly Twitter), Kaushik recounted an experience with a 28-year-old software engineer from Bengaluru — an ambitious professional hoping to buy a 1BHK home within five years. On paper, the client was doing everything “right.” He invested ₹30,000 per month — about 40% of his take-home pay — into mutual funds and ETFs, maintained low expenses, and followed a disciplined savings plan. 

But when Kaushik reviewed his insurance coverage, he found a dangerous gap that could have upended those well-laid plans. 

“He had 2-3 term and health policies, all purchased via online portals recommended by friends. He thought, ‘I’m covered,’” Kaushik wrote. “The gap? Critical illness coverage.” 

The client had one policy covering major illnesses but only up to ₹15 lakh — and believed that would be sufficient. Kaushik challenged that assumption: “Would ₹15 lakh really save your dream of a home and your lifestyle for the next 5-10 years?” 

That question hit hard. In India, Kaushik noted, treatment for major illnesses like cancer or heart disease can easily cost ₹25-50 lakh. And that’s before accounting for loss of income, EMIs, and daily household expenses. In that light, ₹15 lakh was barely a cushion — it was a crack in the financial foundation. 

Kaushik helped the client design a more realistic protection plan: 

• Review current policies for coverage gaps. 
• Calculate the true financial impact of a critical illness, including income loss and treatment costs. 
• Adjust coverage by combining adequate term insurance, critical illness protection, and health insurance to safeguard savings and long-term goals. 

The message, Kaushik emphasised, is simple but powerful: ignoring insurance gaps to save money isn’t smart financial planning — it’s a hidden risk. “It could destroy your financial progress, derail investments, and delay home ownership,” he cautioned. 

Young earners often focus on investing early, which is commendable, but Kaushik’s example reveals that wealth creation without protection is like building a house on an unstable foundation. Insurance is not just paperwork — it’s a shield for your dreams. 

Kaushik summed it up perfectly: “Taking action equals peace of mind. You keep growing your wealth, chase your dreams, and know that one health shock won’t ruin it all.” His closing question serves as a wake-up call for every professional: “Are you truly protected, or just ‘covered on paper’?”